What Will Spotify Mean to Music?

Spotify made some headlines again last week when metal label Century Media pulled its entire catalog from the new-to-us streaming service. While the move prompted some general outrage, especially among the label’s fanbase, it also sparked some debate about the potential impact streaming will have on music now that Spotify has made its debut in the US.

In a statement, Century asserted that “physical sales are dropping drastically in all countries where Spotify is active” and that the move is about assuring the survival of smaller bands. The label said that streaming services can spell death for some groups and that they decided using it was not in their best interests.

The service released a counter statement, indicating that they do pay labels and artists and that “a top Swedish music executive was recently quoted as saying that Spotify is currently the biggest single revenue source for the music industry in Scandinavia.” The company also said it monetizes a subset of music fans who were previously getting their music through illegal downloading.

This is one of those debates that doesn’t have a clear answer. Both arguments have merit as well as flaws, and an element of compromise may be the way to go.

On a personal level, I got an invite to Spotify through Klout very soon after the service became available in the US. I can certainly see why labels would be concerned — even as someone who likes buying music on vinyl and supporting artists, it’s very easy to think to yourself, “Why should I buy that record when I can just stream it?” However, these services can also be excellent marketing tools. The vast library makes it incredibly easy to type in the name of a band you’ve heard of but never listened to and then decide if you like them. I’ve done that and then decided to buy a concert ticket, plus added albums to my mental list of records I plan to buy as soon as I have some spare cash on hand.

The crucial point is how the user acts. If the fans view it as a sampling tool instead of as a primary mode of gaining access to music, it can segue into sales. However, those who use it as the sole method for listening and simply see it as a free (ad-supported) music library aren’t helping artists, at least not in the short term.

Not much can be done about individual behaviors, but maybe labels and services can strike different kinds of deals about what’s available. Instead of being all-or-nothing and, like Century, pulling the entire catalog, maybe labels should negotiate so that only samplings of music are available for streaming. This could allow the listener to determine whether they like it while giving them incentive to purchase the whole thing. They could also try for a similar deal to what happened between Netflix and Warner Brothers by imposing a waiting period between the release date and when it can be streamed.

But it doesn’t make much sense for a label to retreat completely from online streaming, at least not long term. As everything moves to the internet, companies who resist are increasingly going to seem irrelevant, like dinosaurs who can’t embrace technology. Yes, they need to figure out ways to make enough money to survive, but pulling out of a service that appears to be the next big thing is not the best way to do that.

In order to keep supporting working musicians, you should definitely buy some concert tickets. Here are a few events to check out this week: